How to Choose Personal Accident Insurance
By Balkish Rosly
So you've decided to take on personal accident insurance. Great! But do you know there's a trick in choosing the right policy for you? To make the right choice; these are some questions you must ask yourself.
What should I be aware of?
Choosing an insurance policy shouldn’t be a simple process of “Oh, this seems to offer the highest sum assured, I’ll take it!”. Instead, care should be taken to inspect the policy to make sure that you’re getting the coverage you need!
When you choose a PA Insurance policy, you should be aware of the following things:
Coverage
Ensure the policy gives you what YOU need. Different insurance companies will provide different coverage benefits. PA insurance normally covers the following: accidental death, permanent disablement, temporary total or partial disablement, medical expenses, corrective surgery, hospitalisation benefits and funeral expenses.
As mentioned previously, PA Insurance is a more restrictive policy than life insurance in which you have to keep a very close eye on the coverage. For example, if the policy states that it covers death and disablement caused by accident, the keyword here is accident. If the death or disablement is not caused by an accident, the policy does not apply.
Exclusions
Besides the coverage, exclusions of the policy are also important. You have to be aware of it as well to avoid dispute in the event of claim for the compensation.
Death or injury caused by the following events are usually excluded from the policy: war risks, suicide and insanity, terrorism, self-inflicted injury, influenced by liquor, drugs or narcotics, provoked murder or assault, illness and disease like AIDS, HIV, childbirth, pregnancy or miscarriage, involvement in unlawful activities, hazardous sports, operating or riding a two-wheel motor vehicle.
These exclusions vary among different insurance companies. However, some insurance companies do provide coverage for some of the exclusions mentioned above such as hazardous sports, murder or assault (unprovoked) and terrorism provided that it is not of mass destruction.
As expected, the premium will probably be higher. The larger the area of coverage, the higher you have to pay for the insurance premium.
Scale of benefits and sum insured
Scale of benefits is the amount of compensation payable by the insurance company in the event of injury to or loss of limb, sight or hearing. You have to be clear with the scale of benefits offered under your PA Insurance, as it determines the proportion of compensation based on the loss suffered.
For example, the loss of one eye can be fixed at 100% of the insured sum, while another insurance company may only pay 50% of the insured sum, 100% for both eyes. It is best that you compare the scale of benefits offered by different insurance companies.
PA Insurance is a benefit plan which is unlike indemnity policies like motor or fire insurance, where one cannot put a defined value on an individual’s life or loss of body part. The sum insured normally depends on the individual’s annual earnings. As a rule of thumb, the highest insurable sum of a PA policy is based on 6-7 times the individual’s annual earnings.
Claim
You have to fully disclose all material facts in your application form like your health, occupation and number of PA policies currently held.
Evidence and all supporting documents should be submitted along with your claim. If the information is found to be misleading or incorrect, your claim may be void and the insurance company can have the option of taking legal action against you.
This was brought you by BALKISH ROSLY from RinggitPlus.com. RinggitPlus compares credit cards, personal loans and home loans to help Malaysians get more for their money.
